The Financial and Consumer Services Commission released proposed Local Rule 81-510 Self-Dealing on June 24 for a 60-day comment period. The stated purpose of the rule is to provide additional guidance regarding the meaning of certain terms used in Part 10 of the Securities Act (New Brunswick) which relates to self-dealing by mutual funds as well as insider trading. Part 10 of the Act already prohibits mutual funds formed in New Brunswick (or are reporting issuers in the Province) from taking certain actions without exemptive relief, such as the conflict of interest provisions which prohibit a mutual fund from, among other things, making an investment in any person in whom the mutual fund, alone or together with one or more related mutual funds, is a substantial security holder. Many of the new proposed definitions will be familiar to market participants as they relate to prohibited transactions for certain mutual funds, including the meaning of “significant interest” and “substantial security holder”, as they are very similar to those already in use by other provinces, including Ontario. The intention of the proposed rule is for New Brunswick’s approach to the provisions to be more consistent with that taken in many other Canadian jurisdictions, thereby reducing any confusion in the market.
June 30, 2021